Grokster Loses Supreme Court Case

File sharing service provider Grokster recently lost its Supreme Court case, in which it was attacked by the RIAA, the legal defenders of the music industry. Mark Cuban has a great post on it -- check it out.

In the opinion of yours truly, this is a verdict that benefits no one. Consider:

• Firms that manufacture file sharing technologies now have less incentive to do so. Such technologies can get firms in more trouble, so they will be shied away from. This gives the world as a whole less file sharing technology. Imagine if 20 years ago VCR manufacturers could have been sued for what people did with the VCR. There might not have been incentive to innovate, and we might not have the next evolutionary step from the VCR -- the DVD.
• There is still a market for digital music, and the convenience of buying from an authorized distributor is something that many people will enjoy.
  

What really needs to happen is that the music industry needs to think of new ways of making money. Such as:

Music distributors that sell music to sell music to fans need to start selling mp3s, digital music players, subscription music services, and anything that is meant to be sold to someone who wants to listen to music. Imagine an Amazon.com but for digital music only.

Music publishers that own the rights to song should look to license individual parts of songs, as opposed to the whole song. In this way, free distribution of the song serves as an ad for individual elements of the song, like a guitar solo, which can be licensed by other musicians, artists, and makers of commercial media.

Bottom line: Looking to make the market for digital music bigger can indeed make it better for everyone -- fans, artists, and distributors alike.